How much cash does the Great Park really have?

Jan. 27, 2013

Updated Aug. 21, 2013 1:17 p.m.

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The Great Park has the orange balloon and the carousel, but will the proposed man-made canyon be built? The canyon likely is a no-go. Great Park board Chairman Jeff Lalloway and former Great Park board member Bill Kogerman, on separate occasions, dismissed the idea of the canyon ever being a reality. KEVIN SULLIVAN, THE ORANGE COUNTY REGISTER

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Newly elected Supervisor Todd Spitzer addresses the Irvine City Council during public comments on three big Great Park changes earlier this month. The council voted to reduce the number of Great Park board members to five from nine, eliminate some longtime contractors and do an audit of Great Park finances. KEVIN SULLIVAN, ORANGE COUNTY REGISTER

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A view last month of the Orange County Great Park from the heights of its main attraction, the bright orange balloon. Through Nov. 30, the city has spent $215.5 million on the Great Park and has about $48.2 million in cash left, according to the most recent quarterly report from the Great Park Corp. As for available funds, the park forecasts having $21.7 million left to spend by June 30. KIMBERLY PIERCEALL

The Great Park has the orange balloon and the carousel, but will the proposed man-made canyon be built? The canyon likely is a no-go. Great Park board Chairman Jeff Lalloway and former Great Park board member Bill Kogerman, on separate occasions, dismissed the idea of the canyon ever being a reality. KEVIN SULLIVAN, THE ORANGE COUNTY REGISTER

2009: Construction starts on the Western Sector, expected to cost $65.5 million, including renovations of Hangar 244, the Palm Court, museum space, the addition of a carousel and a children's playground.

2010: More than 100 acres is leased to American Produce for farming. The carousel and farmers market open.

2011: The North Lawn, with open space, is finished as well as the Palm Court complex.

2012: California redevelopment agencies are dissolved; $1.4 billion in tax increment disappears. Irvine sues for access to the redevelopment funds. The Department of Energy selects the Great Park to host the 2013 Solar Decathlon.

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Ask an elected official in charge of the Orange County Great Park how much money has been spent and how much is left, and you're bound to get a different answer each time.

The confusion was no more evident than during Tuesday's meeting of the Orange County Great Park's board of directors when none of the five members, who double as the City Council, appeared to be on the same page when it came to how much has been spent and how much was left.

"When I ask how much money we have in the bank today, I'm told $52 million," said Councilman Larry Agran after Councilwoman Christina Shea said the number was $21 million.

Below – some questions and answers relating to Great Park finances, as well as more questions surrounding the park.

Q:So, how much has been spent and how much cash is left?

Toward the beginning of a nearly nine-hour long council meeting, Irvine Councilman Larry Agran displayed a power point screen listing the amount of cash on hand. In 2005, the park had $200 million given to it by private developer Lennar. By Jan. 8, 2013, – the date of the meeting – there was $52 million in cash, he said.

Councilman and now chair of the Great Park board Jeff Lalloway countered, saying the number was closer to $20 million to $30 million.

A staff report from November showed $40.7 million in available funds as of June 30, the end of the fiscal year.

As for what's spent, critics of the park's development have typically quoted $220 million while others put the number closer to a conservative $180 million.

Through Nov. 30, 2012, the city has spent $215.5 million on the Great Park and has about $48.2 million in cash left, according to the most recent quarterly report from the Great Park Corp. As for available funds, which the financial reports say is the "more appropriate measure of immediately accessible funds," the park forecasts having $21.7 million left to spend by June 30, 2013.

Q:What are the financing options going forward, considering there might only be $21.7 million left at the end of this fiscal year and some $1.4 billion in expected tax-increment revenue from redevelopment is all but gone (pending a lawsuit)?

A: The most likely is a plan that's been long contemplated to set up a Mello-Roos district and make the new buyers of homes surrounding the Great Park in FivePoint Communities neighborhoods pay an annual tax. Those funds, as well as payments from the developer until houses and property are sold, would pay off a bond which could be worth up to $1.6 billion if that's how much they seek based on an earlier proposal.

Before lobbying firm Townsend Public Affairs lost its contract with the city and Great Park, part of a cost-cutting measure proposed by Lalloway, the firm's chief executive said it was working with state legislators to pass a law that would create a new funding mechanism, akin to redevelopment, for closed military base development. It was also looking at how the park might be able to use EB-5 funding, the method that allows foreign investors to earn a visa if they invest a certain amount in a development project guaranteed to create jobs in an area that needs them.

Q:Plans for the park have changed through the years. What about the original master plan that included a man-made canyon a couple of miles long?

A: The canyon is likely a no-go. Lalloway as well as former Great Park board member Bill Kogerman, on separate occasions, dismissed the idea of the canyon ever being a reality.

Kogerman, who said in a phone interview in early January that he wasn't a fan of the design that was ultimately chosen and that it included concepts "the likes of which will take billions of dollars to build," including the canyon plan. "I don't think anyone's thinking of excavating 2.5 miles."

Lalloway said recently that it would be too costly to sculpt that feature at the park.

"I think everyone has thought about the canyon not being a part of the future of the Great Park. It's also a tremendously expensive amenity and you know, with the governor eliminating redevelopment money, we just don't have the money to build it," he said.

The runways – which have largely remained intact because of the high-cost to remove them and because they've earned the park revenue for auto rentals – will also likely be ripped up. Lalloway said recently that if they are finally removed, it would also remove all doubt that an airport remains an option – something he said would never happen.

Q:How is the Great Park making money this year? How much will it spend? What will be finished this year?

A: Even if the park sticks exactly to its budget, it will still spend more than it will make in the year ending June 30. Expenses total $17.3 million in an adjusted budget to $16.1 million in revenue.

The largest payments to the park would rely on contributions from the private developer, FivePoint, kicking in to cover infrastructure costs as well as maintenance and operations of the park through several years. Several million dollars have been budgeted, but nothing has come in yet.

The next largest money-maker is leasing space for RV storage which nets the park an annual $1.4 million.

Services the park contracts out will cost it $10.7 million this year while salaries and benefits for the park's 30 or so staff members are worth $4.6 million. Supplies and utility costs are about $1 million combined.

As for construction, the park expects to finish its south lawn sports area by summer which will include soccer fields and basketball courts as well as walking paths and a human-sized chess board.

Q:What is the status of the home construction from the private developer – first Lennar, then Heritage Fields, now FivePoint Communities – and a plan of its own to develop the park itself with a focus on sports fields?

A: Model homes will begin to be built in spring, and home construction is expected to start by summer. Since proposing its own plan for the park in September that eliminated the canyon and lake from the design and included more sports fields, an election shifted the balance of political power in the city and there's a slightly new negotiation team at the city. Before Councilman Jeff Lalloway and former Mayor Sukhee Kang were on a committee to negotiate with FivePoint. Now Lalloway is joined by current Mayor Steven Choi. Any proposal from the developer would have to go through the city.

Q:What's Ken Smith, the Great Park's designer, doing in Irvine?

A: The master designer of the park earned some $42.7 million through mid-2009 and last worked with the park through spring 2011 to help construct the Palm Court Arts Complex, the North Lawn and surrounding parking area. After that, his firm had an on-call designer contract that expired in July 2012 and wasn't renewed. He still rents an Irvine office, though, since he's a registered landscape architect in the state and has continued to do non-Irvine work from there, including work on Anaheim's packing district retail project.

Q:The Great Park Corp.'s staff recently moved to a new location – 32 Discovery in Irvine – after renting space in a portable construction building at the park from FivePoint (Heritage Fields) since April 2006. How much was the park paying for rent then and how much is it paying now?

A: The park was paying some $14,333 per month to FivePoint to rent a portable building on site for office space for about 30 full-time staff members. Now the park is paying about $12,000 a month to rent temporary office space from the Irvine Co. while improvements costing about $721,608 are made to office space in the city's Irvine Train Station near the Great Park's borders.

Q:Could the Great Park staff simply move into City Hall since they're city employees?

A: Councilman Jeff Lalloway said he asked about that option but was told by staff at the time, late last year, that there isn't enough space.

Still wondering?

What questions do you have about the Orange County Great Park? We want to know – and if we can, we’ll get an answer. Email reporter Kimberly Pierceall at kpierceall@ocregister.com

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